By Mohi Narayan and Nidhi Verma
NEW DELHI (Reuters) -Indian oil refiners are increasing gasoline and diesel exports to their highest levels in several years, driven by expanded crude processing capacity and increased domestic ethanol blending that has freed up fuel supplies for overseas markets, traders and analysts said.
Refiners in India, which sources about a third of its crude from Russia, are boosting runs and redirecting surplus barrels abroad.
The rise in exports is expected to help meet Europe’s winter heating oil demand and support Indian refining margins, after refiners turned to discounted Russian crude when Europe and the U.S. imposed sanctions on Moscow for its invasion of Ukraine in February 2022.
Washington D.C. has accused India of profiteering by importing Russian oil at lower prices and reselling refined fuel at higher rates; India has said its purchases have stabilised markets.
This year, India’s crude processing is expected to increase by 130,000 to 160,000 barrels per day to about 5.51 million bpd, with gasoline exports hitting a record high of around 400,000 bpd, according to consultancy Wood Mackenzie.
An Indian refining source, who declined to be named due to company policy, said exports are rising because of weaker domestic demand during the monsoon season and fewer scheduled maintenance outages.
Data provider Kpler pegs India’s 2025 gasoline exports at 387,000 bpd, mainly to Asia.
“The growth in gasoline exports is supported by a rising share of ethanol blending in domestic gasoline consumption,” Woodmac analyst Priti Mehta said.
The world’s second-biggest crude importer and consumer increased ethanol blending in gasoline to 20% this year, up from 12% in 2023.
Refiners, led by Reliance Industries and Mangalore Refinery and Petrochemicals Ltd, are boosting exports to capitalise on strong Asian gasoline margins, which have risen 51% since the start of the year to about $11 to $12 a barrel.
The companies did not immediately respond to Reuters’ requests for comment.
EUROPE’S DIESEL BUYING SPREE
India’s gasoil exports are also expected to hit a four-year high this year, with most volumes heading to Europe to meet winter heating demand, analysts said, as global supply may tighten during the fourth quarter because of heavy refinery maintenance in Europe and the Middle East.
Wood Mackenzie expects India’s 2025 gasoil exports to reach 610,000-630,000 bpd while Kpler’s forecast is at 560,000 bpd.
The rise in India’s exports comes as shipments from Saudi Arabia are set to fall by 300,000 bpd to around 400,000 bpd in October–November with several Aramco refineries scheduled for maintenance, according to consultancy Energy Aspects.
In a sign of the shift, Reliance Industries in late August shipped about 2 million barrels of diesel to Europe on the Very Large Crude Carrier Atokos, an uncommon move aimed at accommodating bigger volumes, ship‑tracking data showed and two Singapore‑based fuel traders said. Diesel cargoes are typically moved on smaller product tankers.
The European Union said in its 18th package of sanctions against Russia in July that it will stop importing petroleum products made from Russian crude after a transitional period of six months. The exemption will continue to apply to imports from Norway, Britain, the U.S., Canada and Switzerland.
(Reporting by Mohi Narayan and Nidhi Verma; Editing by Florence Tan and Tasim Zahid x)
